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INVH earnings call for the period ending December 31, 2018.

Contents:

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Greetings and welcome to the Invitation Homes Fourth Quarter 2018 Earnings Conference Call. All participants are in listen-only mode at this time. (Operator Instructions) As a reminder, this conference is being recorded.

At this time, I would like to turn the conference over to Greg Van Winkle, Senior Director of Investor Relations. Please go ahead, sir.

I'd like to point everyone to our fourth quarter 2018 earnings press release and supplemental information, which we may reference on today's call. This document can be found on the Investor Relations section of our website at www.invh.com.

I'd also like to inform you that certain statements made during this call may include forward-looking statements relating to the future performance of our business, financial results, liquidity and capital resources, and other non-historical statements, which are subject to risks and uncertainties that could cause actual outcomes or results to differ materially from those indicated in any such statements.

We described some of these risks and uncertainties in our 2017 annual report on Form 10-K and other filings we make with the SEC from time-to-time. Invitation Homes does not update forward-looking statements and expressly disclaims any obligation to do so.

During this call, we may also discuss certain non-GAAP financial measures. You can find additional information regarding these non-GAAP measures, including reconciliations of these measures with the most comparable GAAP measures, in our earnings release and supplemental information, which are available on the Investor Relations section of our website.

I'll now turn the call over to our President and Chief Executive Officer, Dallas Tanner.

Dallas B. Tanner -- President and Chief Executive Officer, Director

Thank you, Greg. We are excited to report a strong finish to 2018 and favorable momentum into 2019. Our location, scale, and platform continued to create a best-in-class experience for our residents, evidenced by our industry-leading resident turnover rates. Blended rent growth has accelerated for each of the past three months to level significantly higher than last year and solid occupancy positions us well to continue capturing acceleration in the 2019 peak leasing season.

We are also driving better efficiency on the R&M side of our business, which resulted in fourth quarter performance that exceeded our guidance. Our strong finish to the year brought core FFO per share growth for the full year 2018 to 14%. Before discussing what this momentum may translate to in 2019, I want to take a moment to review our performance on the 2018 operational priorities that we communicated to you at the beginning of the year.

Our first objective was to deliver strong consistent operational results across our core portfolio. We met our expectations for the top line with 4.5% same store core revenue growth, which outpaced residential peers. However, we can execute better on the expense side of the business. After identifying opportunities to be more efficient with repairs and maintenance last summer, our teams have done a great job of starting to capture some of these opportunities. We have more work to do but are pleased with how our performance improved in the second half of 2018.

Our next objective was to further enhance the quality of service we provide to our residents. The ultimate scorecard on service comes when it is time for residents to make a renewal decision, and we are thrilled that our turnover rate on a trailing 12-month basis improved each quarter in 2018 to new all-time lows.

Our third operational priority was to execute on our integration plan. In addition to finding an incremental $5 million of projected and state synergies, we also beat expectations for 2018 achievement by capturing $46 million of annualized run rate synergies in the year.

With respect to investments, our priority was to continue increasing the quality of our portfolio by recycling capital. In total in 2018, we sold roughly $500 million of primarily lower rent band homes that no longer fit our long-term strategy. We recycled capital from dispositions in both the purchase of almost $300 million of homes in more attractive sub-markets with higher expected total returns and prepayments of debt. Finally, we made progress on our path to an investment grade balance sheet. We reduced net debt to adjusted EBITDA to below 9 times, compared to approximately 11 times at our IPO in early 2017. We also improved our weighted average maturity and cost of debt.

Looking ahead to 2019, we are excited about our opportunity for growth. Let me address these three opportunities in particular; revenue growth, expense controls, and capital allocation. With respect to revenue growth, fundamentals are strong as they've ever been for single-family rental. In our markets, household formation in 2019 are forecasted to grow at almost 2% or 90% greater than the US average. Construction of new single-family homes is not keeping pace with this demand and has recently slowed further. In addition, affordability has become a bigger challenge for potential home buyers due to a combination of home price appreciation and higher mortgage rates compared to last year. We are seeing this play out in our portfolio today with same store move-outs to home ownership, down 17% year-over-year in 2018. Leading housing economist, John Burns estimates that the cost to run a single-family home is lower than the cost to own a comparable home in 15 of our 17 markets today, by an average discount of 16%. We believe our product provides an attractive solution for customers, who want to live in a high quality single-family home without making the financial commitment of homeownership. Furthermore, we believe the location of our homes in attractive neighborhoods, close to jobs, and great schools, and the high touch service we provide differentiate Invitation Homes and make the choice to lease with us even more compelling.

Regardless of what the broader economy may bring in the coming years, we feel that our business is well positioned. Even if we were to experience a cooling of the economy, our portfolio could continue to benefit from demographics that are shifting more and more in our favor and from a sticky single-family resident base that would likely find homeownership incrementally less attractive under more challenging economic conditions.

We are also excited about our opportunity on the expense side of the business and are focused in 2019 on adding to the progress we made in the second half of 2018. Newly implemented changes to our repairs and maintenance workflow and route optimization systems are paying dividends already, but we still have plenty of opportunity to be more efficient.

We also believe the integration of our field teams and property management platform in 2019 will be a positive catalyst for expense improvement. If one team operating on one platform we will be better positioned to find new ways to refine our business and take resident service to higher levels.

With respect to capital allocation, our plan in 2019 remains focused on the dual objective of refining our portfolio and reducing leverage on our balance sheet. The markets we're in remain healthy, providing compelling opportunities on both the acquisition and disposition sides for us to achieve our capital recycling goals. Abundant capital from potential buyers and limited inventory in our markets create an attractive opportunity for us to prune our portfolio.

We also have multiple uses for these proceeds including buying homes in more attractive submarkets, reinvesting in our portfolio through value-enhancing CapEx, and prepaying down debt.

Before we move on, I want to say a few quick words about our team. It is a thrill to have the opportunity to lead the company I founded with my partners, a company that is full of talented people from top to bottom. I'm fortunate to be stepping into the CEO role with the company in an outstanding place. Thanks in part to the leadership of Fred Tuomi. Fred helped guide Invitation Homes through what has been a very successful merger and integration, has positioned us to move forward better than we've ever been before. We thank Fred for his leadership and wish him the absolute best.

Moving forward, we will continue to stay true to our DNA and the strategic path we've been on since day one. We will put residents first. We will drive organic growth and an outstanding living experience by leveraging our competitive advantage of location, scale, and high touch service. We will be opportunistic with respect to external growth. We'll progress towards an investment grade balance sheet and we will do all of this with the best team in the business. I am fortunate to be surrounded by true experts and industry pioneers on our field and corporate teams, as well as in our boardroom.

To all of our associates, thank you for a great finish to 2018 and let's continue to build on our momentum in 2019. With that, I'll turn it over to Charles Young, our Chief Operating Officer, to provide more detail on our fourth quarter operating results.

Thank you. As Dallas said, the fourth quarter of 2018 was a great one for us operationally. Our teams did a fantastic job capturing rent growth and occupancy to put us in a strong position going into 2019, drove better R&M efficiency resulting in outperformance of our guidance in the fourth quarter, and most importantly, we continue to provide outstanding resident service.

I'll now walk you through our fourth quarter operating results in more detail. Same-store core revenues in the fourth quarter grew 4.6% year-over-year. This increase was driven by average monthly rental rate growth of 3.8% and a 70 basis point increase in average occupancy to 96% for the quarter. Same-store core expense growth in the fourth quarter was better than expected. Core controllable costs were down slightly year-over-year even with the tough R&M comparison versus the fourth quarter of 2017 due to that year's hurricanes. Property taxes increased 15.1% year-over-year, in line with our expectation -- expectations due to the timing items discussed on last quarter's call. As a result, overall same store expense growth was 7.4% year-over-year. This brought our fourth quarter 2018 same store NOI growth to 3.2%. For the full year 2018, same store NOI growth was 4.4%, 65 basis points ahead of the midpoint of guidance provided on our last earnings call.

Importantly, we have made steady progress on improving our R&M efficiency by implementing numerous changes to systems and processes after opportunities for improvement were identified. With these changes, we have improved how work orders are allocated between in-house technicians and third parties. Our corresponding service trips are scheduled and the routes the technicians follow to optimize their time. In the fourth quarter, we also rolled out an important update to our technology platform that enabled all of our internal technicians to perform work on any home in our portfolio, not just the homes associated with our legacy organization. This made a material difference in the productivity of our maintenance technicians in the fourth quarter. We still have work to do though and we'll continue implementing process improvements and ProCare enhancements in the months leading up to 2019 peak service season.

Next, I'll provide an update on integration of our field teams. After successful results in the testing phase, we began market implementation of our unified operating platform in November. As of today we have teams in five markets representing almost 40% of our homes functioning under our go-forward structure and platform. Transitions have been smooth and feedback from the field teams have been extremely positive.

We plan to roll out the platform to our remaining markets in waves over the next several months. This rollout is expected to unlock the remainder of the $50 million to $55 million of total run rate synergies we have guided to by mid 2019. As of year-end 2018, our run rate synergy achievement was $46 million.

Next, I'll cover leasing trends in the fourth quarter of 2018 and January 2019. Fundamentals in our markets remain as strong as ever and we are executing well, both renewal rent growth and new lease rent growth have increased sequentially in each of the last three months. Renewals averaged 4.7% in the fourth quarter of 2018 and new leases averaged 2.1%. Notably, new lease rent growth is now exceeding prior year levels and was a full 70 basis points ahead of last year in the fourth quarter of 2018. This resulted in blended rent growth of 3.7% in the fourth quarter of 2018, up 20 basis points year-over-year. Same time resident turnover continued to decrease, driving occupancy to 96% in the fourth quarter of 2018, up 70 basis points year-over-year. Each of these leasing metrics improved further in January. Lender rent growth averaged 4.3% in January 2019, up 90 basis points year-over-year and occupancy averaged 96.2% in January 2019, also up 90 basis points year-over-year.

The fundamental tailwinds at our back and occupancy in a strong position, we are confident as we start the new year. Our field teams are focused on execution and are excited to leverage our integrated platform to deliver even more efficient resident service.

Thank you, Charles. Today I will cover the following topics, balance sheet and capital markets activity; financial results for the fourth quarter; and 2019 guidance.

First, I'll cover the balance sheet and capital markets activity where we had a very active and successful year. Let me start with a few highlights about where we started 2018 versus where we ended it. Net debt $9.1 billion to start the year, $8.8 billion to end the year. Net debt to EBITDA, 9.5 times to start the year, 8.8 times to end the year, pro forma the conversion of our 2019 convertible notes. Weighted average years to maturity, 4.1 to start the year, 5.5 to end the year. Unencumbered homes, 42% of homes to start the year, 48% to end the year. In weighted average interest rate, 3.4% to start the year, 3.3% to end the year in a rising rate environment. We accomplished all of this by prioritizing free cash flow in bulk disposition proceeds for debt prepayment and by refinancing debt in 2018 with $4.2 billion of proceeds from our four new securitizations.

While we remain opportunistic, we anticipate less refinancing activity in 2019 with no secured debt maturing in 2019 or 2020 and only $373 million maturing in 2021. However, we will continue to prioritize debt prepayments as part of our efforts to pursue an investment grade rating and have made incremental progress already with the pre-payment of $70 million of secured debt in January.

We will continue our deleveraging strategy by electing to settle conversions of our $230 million of 2019 convertible notes in common shares. We view this decision as a way to reduce net debt to EBITDA by approximately 0.25 turns while incurring minimal incremental dilution to core FFO per share. Our liquidity at quarter end was over $1.1 billion through a combination of unrestricted cash and undrawn capacity on our credit facility.

I'll now cover our fourth quarter 2018 financial results. Core FFO and AFFO per share for the fourth quarter increased year-over-year to $0.30 and $0.25, respectively. Primary drivers of the increases were growth in NOI and lower cash interest expense per share. For the full year 2018, core FFO and AFFO per share increased 13.7% and 8.1%, respectively. As a result of our anticipated growth in AFFO per share in 2019, we have increased our quarterly dividend to $0.13 from $0.11 per share. We continue to target a low dividend payout ratio, as we believe a beneficial use of cash is to further pay down debt.

The last thing I will cover is 2019 guidance. As Dallas and Charles discussed, we believe that we continue to have strong fundamental tailwinds at our back and entered the year from a strong occupancy position with accelerating rate growth. As such, we expect to grow same store revenue by 3.8% to 4.4% in 2019. Home price appreciation in our markets over the last year or two suggest that growth in real estate taxes in 2019 is likely to remain elevated, albeit lower than the growth we saw in 2018. As a result, we expect overall same store core expense growth to moderate from 2018 levels to 3.5% to 4.5% in 2019. Core controllable expenses are likely to grow less than that as we believe we have positioned ourselves to better control R&M cost in 2019, but we still have work to do. This brings our expectation for same store NOI growth to 3.5% to 4.5%.

Full year 2019, core FFO per share is expected to be $1.20 to $1.28 and AFFO per share is expected to be $0.98 to $1.06, representing year-over-year increases of greater than 5% and 7% at the mid points, respectively. Primary driver of these expected increases is growth in same store NOI. Lower property management and G&A expenses and lower interest expense are also expected to contribute to growth. A detailed bridge of our 2018 core FFO per share to the midpoint of 2019 core FFO per share guidance can be found in our earnings release. There are a handful of items likely to impact the progression of same store growth in core FFO and AFFO growth from a timing perspective over the course of the year.

With respect to revenue growth, occupancy comps are easier at the start of the year versus later. Regarding expenses, core expense growth is likely to be highest in the first quarter. First, while we have made great progress addressing items related to our integrated R&M system that drove inefficiency in 2018, we still have work to complete as part of our plan. We do not expect to be fully optimized in the first quarter of 2019. Second, as we discussed last year, other income and resident recoveries in the first quarter of 2018 were higher than normal as a result of post-merger alignment of the resident utility bill back timing across the two legacy companies. This will create a more difficult comparison for core expense growth in the first quarter of 2019. These two items are expected to more than offset the favorable impact of comping against a period in the first quarter of 2018 with higher than normal work order volume as a result of 2017’s hurricanes.

Also regarding expenses, the year-over-year increase in real estate taxes is likely to be materially lower in the fourth quarter of 2019, than in the first three quarters of the year. As discussed previously, we booked an unfavorable real estate tax catch up in the fourth quarter of 2018 for tax assessments that came in higher than expected. This creates an easier comp for the fourth quarter of 2019.

Finally, the 2019 convertible notes are expected to convert to common shares on July 1, 2019. This will impact the interest expense and share count used to calculate core FFO and AFFO per share by treating the notes as debt for the first half of 2019 and as equity for the second half of 2019, assuming that the notes convert as expected.

I'll wrap up by reiterating how much we are looking forward to 2019. Fundamentals are in our favor and we have multiple levers we believe we can pull to create value. We are excited to move on to one platform across the entire organization and to execute on that platform to deliver outstanding results to both our residents and our shareholders.

With that operator, would you please open up the line for questions?

Questions and Answers:

Operator

Thank you, Mr. Freedman. We will now begin the question-and-answer session. (Operator Instructions) The first question will come from Nick Joseph of Citi. Please go ahead.

Nick Joseph -- Citi -- Analyst

Thanks. As you roll out the unified operating platform across the portfolio, what lessons have you learned from the process? Are you making any adjustments for the other markets based off of them?

Yeah, this is Charles. We've made really good progress in implementing the combined portfolio rollout. As I said in my remarks, we've implemented in about five markets, which equals about 40% of our total homes. We've been really thoughtful based on what we learned in 2018 that we've taken a really measured pace on how we roll it out. We expect to be done around mid 2019. We've made a decision to implement in the slower time of the year which is working in our favor and we are careful also around the timing in which we roll it out during the month to make sure that we're not impacting the field teams. We went through multiple rounds of testing to make sure that things were working as expected before we went in. We have great training. We've learned from each of the rollouts to get better in our training and implementation has been great. The feedback from our field teams have been very positive. And as I said, we expect that we'll be there by mid-year. Bottom line is the teams are really excited to get on one combined platform because they were working in multiple systems before, so that we see this as a really positive thing.

Nick Joseph -- Citi -- Analyst

Thanks. Then Dallas, congratulations on the promotion. When you took over as Interim President in August, the Board formed a special committee to work with you and the team during Fred's absence. Is that committee still in place and what's the Board's role today?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Yeah, hi, thanks for the question and, excuse me, the compliment. Yeah, the Board is still functioning in a similar fashion as we were -- and that Executive Committee will stay in place through 2019. As you guys know, we have a very supportive Board with a ton of excellent experience behind it. So we'll continue to use that. It's been strategic for us, as we've vetted out some of these things that Charles just discussed in terms of how we would integrate going forward and we thought through some of the processes. So they've been very supportive in that capacity and we would anticipate them to continue doing so.

Nick Joseph -- Citi -- Analyst

Thanks.

Operator

The next question will be from Drew Babin of Baird. Please go ahead.

Drew Babin -- Robert W. Baird -- Analyst

Hey, good morning.

Dallas B. Tanner -- President and Chief Executive Officer, Director

Good morning, Drew.

Drew Babin -- Robert W. Baird -- Analyst

As it pertains to AFFO guidance, I was hoping you can talk about the direction of recurring CapEx per home in '19, understanding that in '18 with the Starwood Waypoint merger, there might have been a little bit of noise there. Can you just give us a little more color on the trends in that number as well as how you think about our revenue enhancing CapEx this year?

Sure. Drew, I’ll take this, this is Ernie. With regards specifically to our recurring CapEx, we expect overall net cost to maintain, which is both our operating expenses associated with repairs and maintenance, as well as turnover -- as well as the capital associated with that, that would be our recurring CapEx. And that's going to be up approximately about 3% year-over-year. We definitely have some easier comps to go up against in and we certainly had some improvements, but as we talked about in the prepared remarks, we're not fully optimized today and of course we want to be cautious before we get into peak leasing season, before getting too far ahead of ourselves and where things may end up. Where we sit today and where we're at, with the progress we made, we feel like we're back to a more normal type growth rate with the opportunity maybe do better as we go forward. So I would expect plus or minus in the 3% range for net cost to maintain to grow. Drew, remind me what the second part of your question was?

Drew Babin -- Robert W. Baird -- Analyst

It's revenue enhancing CapEx, whether we can expect any kind of directional change from last year there?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Hey, Drew, this is Dallas. I'll answer this. We continue to -- expect our focus to continue to find ways to optimize these assets on a like-for-like basis as they turn. Now some of that allows us these opportunities with revenue enhancing CapEx. I would expect that program to continue to develop, if not maybe be a little bit more active as we spread into some of our West Coast markets. We certainly see a number of different opportunities outside of just the smart home functionality with which we're continually adding into the portfolio today. We're finding that our customers, they are sticky by nature, but what's been really interesting over the past year as we've piloted revenue enhancing CapEx and gotten better at how we implement that process is how many times our customers, on a renewal or on a new lease, want to actually pay up to optimize parts or sections of their house. This is a win for both us and the customer because we're able to harden the asset in theory, and also get a better risk adjusted return on the revenue increase. And that's outside of the way we would normally underwriter a property. So expect us to do more of it. We're looking in getting smarter. Charles and his team have done a terrific job on the procurement side to find ways that we can continually enhance that experience for the customer.

Drew Babin -- Robert W. Baird -- Analyst

Thank you. That's helpful and then lastly just on the guidance expectations, non-cash interest and share-based comp, I was hoping you could kind of give us those numbers, just given the accounting kind of how those play into the core FFO calculation.

Yeah, Drew, we have not provided guidance for those in the past and so let me think about, what we can do and get something out there for folks to help with modeling. But I don't have anything I can share with that with you today.

Drew Babin -- Robert W. Baird -- Analyst

Okay. We can follow up on that, that is all from me. Thank you.

Operator

Then the next question will be from Douglas Harter of Credit Suisse. Please go ahead.

Douglas Harter -- Credit Suisse -- Analyst

I was hoping you could talk about where you are in the process of optimizing the portfolio and kind of how you think about the home count as we move through 2019?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Yeah hi, Doug, this is Dallas. We've been pretty vocal about our desire to continually refine and optimize the portfolio. And the nice thing about the merger is we've had enough time and distance. We knew there were some homes initially both with which we wanted to sell and also some areas where we wanted to scale up and could find and drive greater efficiencies in the portfolio by acquiring. Expect us to do more of the same. We had a pretty busy year in terms of what we were selling and it comes in a variety of shapes and sizes to why we sold. We certainly were active in parts of Florida where we now on a combined basis had over 25,000 homes post merger. Expect us to continually look for areas like that where we can continue to refine the portfolio, create efficiencies for the operating teams and build on the scale and density that we have in those markets.

In addition, we also have outlier locations or geographies where we'll at times or seasons look for ways to refine and improve the way that those parts of the portfolio is behaving. And lastly, I'd just add, there are occasions and we're starting to see this a little bit in some of our West Coast properties where if a home just becomes too valuable and ultimately, we think it's better suited for an end-user, we'll sell that home and take those gains and recycle capital in the parts of markets where we see still significant opportunities for good risk adjusted return.

Douglas Harter -- Credit Suisse -- Analyst

Dallas, just following up on that, which are the markets where you see the best opportunities to kind of recycle capital into?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Well. Funny enough, we were pretty active in 2018 in still lot of West Coast markets. We've been pretty vocal about the fact that we love Seattle, we love the growth that's going on there. It's evidenced in some of the new lease and renewal rates that we're seeing in the business today. We also still are finding really good opportunities in the Southeast. And if we could, we would buy more in California and markets if those opportunities were available to us. We just see limited supply in today's environment. As we've stated, household formation in our markets today, is almost two times than the national average and we're feeling that in the parts of our business, specifically around new lease growth and renewals. But generally speaking, you've seen that we've been getting out of parts of the Midwest over time and we've continued to recycle coastal where the majority of our footprints are today.

Douglas Harter -- Credit Suisse -- Analyst

Great, thank you, Dallas.

Operator

The next question will be from Shirley Wu of Bank of America Merrill Lynch. Please go ahead.

Shirley Wu -- Bank of America Merrill Lynch -- Analyst

Hi guys, thanks for taking the question. So in your expense guidance of 4%, do you think you could break out like different markets in terms of growth or personnel or R&M for '19?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Yes. Shirley, what we are comfortable providing today is because taxes are almost half of our expense number. I can provide some guidance around what we think would happen with taxes and what's going to happen for everything else, which is really roughly the other half. And I think as everyone knows, home price appreciation continues to be pretty strong in our markets and it is run over 6% across the board on a weighted average basis across our markets. And with that, and we do expect that property taxes in 2019 will be up somewhere in the fives for us. And of course Prop 13 in California helps mute that a little bit for us with having 20% of our portfolio in California.

And so the real estate taxes being up we think somewhere in the fives, we think everything else will be less than 3% to get to our -- at the midpoint, to get to our guidance range of 3.5% to 4.5%. And then as the year plays out, as different things earns in, we'll see some things flow through on those other expense items that from a guidance perspective we're comfortable providing guidance in that way, Shirley.

Shirley Wu -- Bank of America Merrill Lynch -- Analyst

That's helpful. So, also recently, mortgage rates have really pulled back, especially in the last couple of months, but your move-outs to home buying has still – has continued to trend down. Is that something that you’re concerned about or moving forward how do you think about that?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Well, we are certainly not concerned about it because it's been fairly consistent over the past couple of years. Less than 10% of our overall portfolio on an annual basis moves out of our business to go buy a home, at least that's what we've seen over the first few years as a public company. We look at it a couple of ways. I mentioned it in my earlier comments, we are seeing a real shift in terms of affordability to your point and we're picking up some of the net benefit of that, quite frankly in our business today. As we mentioned before, 15 markets of our 17 markets, based on the research that we look at and follow are now more affordable to lease, call it an entry-level product than it is to buy in today's environment. So we think interest rates there actually maybe push people into a longer-term lease with us or maybe offer an opportunity for consideration to choose the leasing lifestyle. And there are some markets to your point that are a bit more dislocated. I mean in Seattle, Washington, for example, that differential can be as high as 30%. And so we look at that as also an opportunity to make sure that we're providing a best-in-class service and an experience that people are willing to pay for. We look at that as an opportunity.

Shirley Wu -- Bank of America Merrill Lynch -- Analyst

Got it. Thanks for the color, guys.

Operator

The next question will be from Derek Johnston of Deutsche Bank. Please go ahead.

Derek Johnston -- Deutsche Bank AG -- Analyst

Hi, everybody. Can you discuss how turn-times trended in 4Q and where you'd like to see them in 2019? And really if the new R&M platform drives any benefit there?

Yes. So this Charles. Turn-times have been kind of mid-teens for us and we'd like to bring that down. Again we've been consolidating the teams, the offices, and the platforms as we get all into one platform, as we talked about and finalize that integration at the first half of the year here. I think we'll be in a much better shape to bring those times down. As we think around turn, it really is the kind of quality and location of our homes and we make sure that we are delivering a high quality product. That delivery of product will relate to the R&M in terms of any work orders that may come afterwards. Part of what we want to implement in 2018 that's important is our ProCare service. And that's a follow on after the turn when the resident moves in to make sure that they understand their responsibility but also we bundle some of those work orders to a 45-day visit that will allow us to kind of manage that process with the resident on the R&M side.

So that's where the overlap and the transition happens, but ultimately they are two separate portions of the business. And as I said, we'd like to bring those turn-times down and we expect that we'll start getting into the low teens as we get consolidated.

Derek Johnston -- Deutsche Bank AG -- Analyst

Great. And last one for me, how many customers are now subscribed to the Smart technology and what other ancillary income drivers have you guys identified?

Yes. So right now we have about a third of our homes have the Smart Home installed. So a little over 30,000, about half of those are paying customers, and that builds every time that we move a resident in, 70% to 80% of those residents are opting into the service, which is great adoption rate. In terms of other ancillary, with the integration we've really been focusing on finalizing that but once we get through the integration we see there's opportunities, whether it's in moving services or pet services, pest control items that we can think around, filters, there are a number of items that we want to attack, but right now we're focused in on making sure that we finalize the integration.

Derek Johnston -- Deutsche Bank AG -- Analyst

Good stuff. Thanks.

Operator

The next question will be from Richard Hill of Morgan Stanley. Please go ahead.

Richard Hill -- Morgan Stanley -- Analyst

Hey, guys. Wanted to just ask a maybe a couple of questions about how you think about 2019 where you didn't give guidance. You had some success with bulk sales, so Dallas, I'm wondering if you can give us any sort of color around those bulk sales, cap rates, breadth of buyers? And then, do you think that's going to continue in 2019? How are we supposed to think about that going forward?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Sure. Thanks, Rich. A number of things -- as I mentioned earlier in my comments, we still see a quite a bit of demand in the marketplace for stabilized product being sold from an institutional operator like ourselves. So I would expect that we'll still explore some bulk opportunities this year and really quite frankly any year where our scale and density allow us to facilitate those types of transactions. In terms of what we did in 2018, we sold homes on average that were much cheaper than the homes that we are acquiring. I think if you look at the fourth quarter, as an example, the 1600 plus homes we sold in Q4, we had an, call it an average price per home around $175,000. We're recycling that money into homes that were well north of $300,000 on a per property basis. So as you think about what those cap rates are, you would certainly -- when you're selling cheaper product, generally on a pro forma basis, you're going to see cap rates that are a little bit higher just because your denominator being so low in terms of your asset price, pricing. And so, what we sold over the majority of '18 were homes that were closer to 6 cap and recycling the homes that were well within the mid fives. Now that doesn't tell you the whole story. As you think about the way we've recycled in terms of what we bought and what we sold, on average we're buying homes that were renting for about $500 more or less more than the homes that we were selling. So that additional $6,000 in revenue is a really smart way to operate on the long-term when you think about all the incremental costs that can go into this business.

Richard Hill -- Morgan Stanley -- Analyst

That's great detail. Hey guys, you guys put up a really impressive margin number this quarter. So how are we thinking about that sort of near-term and long-term? So I guess the question, is that 65% plus margin, is that sustainable near term and do you think you can still get that into the high 60s? I'm going to push it to 70 area. What are you thinking about there?

Yeah, Rich, I think the answer is it really all depends on how things move forward with some capital allocation and other things. And you’ll recall, as you know, fourth quarter, first quarter typically are our highest margin quarters. But for the entire year of 2018, in the year we certainly had some challenges. We put up 64.5% margin, which we're pleased to do even with the challenges that we had. And as we continue to refine the portfolio from a capital allocation perspective and importantly, as Charles continues to refine what he's doing on an operating standpoint, and our guidance implies that the margins will be pretty similar from 2018 to 2019 based on what we put out there for midpoint of revenue expense and NOI guidance. We think there's opportunity for that to continue to increase to somewhere certainly in the higher 60s. We do have, I think half a dozen markets today that are in the 70s. And certainly, as Dallas looks to do some things on the capital allocation, and especially that -- the homes we are selling out of in some of the markets where we’ve been disproportionately selling, those markets do have lower margins. So you could certainly see -- you could force your way to a 70% type margin. But I think for where we are at, where we want to have our homes in the portfolio, I think increasing it by a few 100 basis points from where it is now into the higher 60s is certainly a very achievable goal over the next period of time.

Richard Hill -- Morgan Stanley -- Analyst

Great, thank you. And just one final question. Dallas, going back to your prepared remarks on affordability, when you think about affordability, are you sort of doing apples-to-apples rent-to-mortgage payment or do you guys think about affordability relative to the cost of owning a home differently?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Yeah, I think we like to look at it a couple of different ways. I think the way to really look at it and so that you keep everything constant, is you got to think about housing costs as not only your mortgage but also some ongoing maintenance expense that a normal homeowner would incur over ordinary course. And that's the way Burns and a number of other economists tend to look at it. We've looked at a couple of different pieces, we've done some of our own research obviously with the data that we have. And you're certainly seeing that dislocation we talked about earlier. Now there is time and seasons where that's your friend and there’s a time and season where maybe it isn't. But right now, it certainly feels like we're positioned to capture some of that affordability demand that people are looking for some relief, specifically in the West Coast where we're seeing rising home prices, as well as the rising rate environment not helping the homeownership story.

Richard Hill -- Morgan Stanley -- Analyst

Perfect. Thanks guys. That's it.

Dallas B. Tanner -- President and Chief Executive Officer, Director

Thanks, Richard.

Operator

The next question will be from Jason Green of Evercore. Please go ahead.

Jason Green -- Evercore -- Analyst

Good morning. On the deceleration in same-store revenue growth that your guidance implies, is that kind of due to conservatism on occupancy, slowing rent growth, or a combination of the two?

Yes. If you look on Page 23 of our earnings release, Jason, I think it’s a helpful guide to what happened in 2018 and give you a sense for what we think is going to happen with regards to 2019. You see in 2018, our revenue growth of 4.5% was made up of 3.9% rental rate growth, 50 bps increase in occupancy and then other income was a little bit better than those. And so that's how you get to a 4.5%. To get to the midpoint of our 4.1% revenue growth, we think we would have similar rental type growth, maybe a tick lower than that at the midpoint, but very similar. As you recall, we have accelerating rent growth here starting in the fourth quarter of '18 and we saw that in January, as Charles talked about. But for the first three quarters of 2018, it was a deceleration year-over-year. So we need to earn that in. And then on occupancy growth, we do expect occupancy to be better than it was in 2019 versus 2018, but not necessarily 50 bps better.

Now that said, Charles is off to really good start in January, up 90 basis points and we are off to a good start on rental rate as well. And so when you factor that in -- that's why we don't think we quite get to 4.5% with regards to our -- the midpoint of our guidance, but there’s certainly a path for us to do better than that, certainly seen how well we started off the year with January.

Jason Green -- Evercore -- Analyst

Got it. And then the synergies that you guys had mentioned from the merger, are those factored in the same-store guidance, or do those represent additional upside?

No, those are factored into our guidance. And so, about 90% of the synergies that hit the field hit same store, the rest hit the total portfolio because we’ve got 90% of our homes in same-store. So those are factored in. So, with regards to getting to numbers we expect to from an expense perspective, it's taking into account synergies that we earned in 2018 as well as what we anticipate the timing on those synergies. And to be clear, that -- those synergies aren't all going to earn in on January 1st. As Charles talked, it's going to be until mid-year and we got the whole portfolio rolled out. And as we do that, it's about 60 days after that where we get to that final numbers and want to have some overlap period to make sure things are working right in the field. And so those take a little while to earn here in 2019, but that's all factored into our guidance.

Jason Green -- Evercore -- Analyst

Got it. And then last one from me. Total cost to maintain came in for the year at about $3,200 per home. You're talking about that increasing potentially around 3% in '19. Previously, you'd said the long-term rate is probably somewhere between $2,600 and $2,800. So I guess, first, is that still the long-term rate that you guys feel will be necessary for a total cost to maintain the homes. And then, how long does it take for you guys to get there?

And so we came in I think close to $3,100 and $3,200, I think it's $3,109 for the year. But notwithstanding, we first came out with our IPO way back a couple of years ago, we did say adjusting for inflation we expect to be at $2,600 to $2,800. So those numbers are going to move on us, those guideposts, if there is inflation in the RM world and we've actually seen probably more inflation in that than in other areas just on what's been going on with broader products and services. That -- you always need to reset that. That said, we're not quite where we think we're going to be in getting back on that track and as we further optimize and get things rolled out on the R&M side, and we've talked about in the prepared remarks, we had a good fourth quarter. It came in stronger than we thought and we're excited about that with regards to what happened with R&M to bring us down to that $3,100 number that we came in.

For the year, we are going to be cautious as we come out this year to make sure things are going as we expect and move forward. I think once we're fully optimized, everyone is working on the same platform, that's when we have the real opportunity to get back to numbers that were more like where we thought we would end up with regards to the longer-term, growing for inflation, where we thought cost to maintain would be.

Thanks very much. Are you seeing a pickup in interest from home builders in partnering with you?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Hi, Jade, it's Dallas. It's interesting, we've certainly had a number of discussions around opportunities and we're looking at a couple of different things. As I've mentioned before, we really are channel agnostic and we just want to make sure that we're focused on the right locations. So we're interested, we like the fact that I think home builders are getting more and more comfortable with the idea of single-family owners being in their neighborhoods and buying product. I certainly could see it becoming more and more of an opportunity for us going forward. I don't think we have to take on any of that development risk ourselves, I mean, we've been pretty clear about that. But we certainly want to look for strategic partners that we can then be potential buyer for. We think that there is definitely opportunity for us there to grow.

Well, it's an interesting concept that continues to evolve. We certainly know some of the operators and the owners that are building that product today. I think it's kind of a shift, quite frankly, I think it plays into some of the same demographics that we've been talking about. There is this 65 million person cohort between the ages of 20 and 35 that are coming our way that want quality of choice. It's no different than the business we run today. I think where you got to be careful though, Jade, in some of those opportunities is you got to still stay location specific in terms of where you want to invest capital. That's a -- it's a small boutique opportunity in an infill location with really good rents and that the square footages are similar to what we would normally own, it would be something we look at. What I've seen across a broad spectrum of some of that product is it's typically been much smaller footprints between 800 and 1300 square feet and that's not really our sweet spot, more or less. But if we saw an opportunity that was infill that made sense, we'd certainly want to look at it and we're encouraged by the fact that people are recognizing that leasing is a real choice right now for people.

Jade Rahmani -- Keefe, Bruyette & Woods, Inc. -- Analyst

And just on the influence of iBuyers on the market, are you competing directly with them with respect to acquisitions? Are they distorting pricing or impacting the market in any way? And is there a potential opportunity to enter into joint ventures to provide centralized property management services, since they are active in many of your markets?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Let me answer kind of those in part. And I think you're thinking about the world the right way Jade, in terms of being an entrepreneur this is an interesting moment in time with these iBuyers. It certainly feels like there's a new company popping up every day. Who knows what will actually, stick or last or who will be the king pins in the long term. This is public record. We've been supportive of companies like Opendoor and Offerpad and Zillow that are out there making the home buying and selling experience much easier for the customer. Now 5.5 million transactions in the US occur every year. So you should think about that. I mean there's plenty of space for both brokers, iBuyers, and individual investors to be buying and selling homes in the US. We certainly want to look for strategic partners that we can partner with to help grow our footprint in our portfolio. We get the question a lot about, would you want to do third-party management? You could certainly see a day where that could be interesting, but now for us it's just not really our focus, our focus is on growing our own footprint. We see plenty of opportunity within our own book of business where we can continue to grow the Invitation Homes product along with the Invitation Homes fit and finish standards, as well as the service levels that our customers are wanting to expect. So it's not in our near-term horizon by any stretch.

Jade Rahmani -- Keefe, Bruyette & Woods, Inc. -- Analyst

Thanks so much.

Douglas Harter -- Credit Suisse -- Analyst

Thanks, Jade.

Operator

Your next question will be from Wes Golladay of RBC Capital Markets. Please go ahead.

Wes Golladay -- RBC Capital Markets -- Analyst

Hey, good morning guys. I can appreciate that there's a lot of moving parts. Last year, on the expense side, volatility to the upside and the downside, but this year, you have a 1% range on your same-store expenses. Should we take that as a sense that all the moving parts are behind us, that would be more of a normal environment this year?

Yeah, Wes, we certainly think so. We want to be cautious and want to set a range that we thought was appropriate. At the end of the day, we feel lot better sitting today with the lessons learned over the last 12 months. You recall, last year at this time when we were providing guidance, the merger had just closed about 60 days ahead of that and actually closed ahead of schedule. We all thought they would actually close in early January but fortunately we're able to get it done quicker. We're bringing two companies together. We run on the same platform, we're learning how each of the companies were doing things. And in hindsight, we got a lot of things right but a couple of things we didn't unfortunately and that caused some noise. We definitely feel much more confident. But again, we're not 100% of the way there as we talked about in a couple of other things, but we're certainly so much further along. So we are feeling better for sure than we were last year and certainly as the year progressed.

Wes Golladay -- RBC Capital Markets -- Analyst

Okay. And then -- you made the comment about the R&M being a little bit lower from the leasing from early last year. But looking at this year, what are your expectations for blended rent growth for each of the quarters and not by quarter, but just in general, do you expect to continue to modestly accelerate throughout the year based on the supply and demand you're seeing?

Yeah. We want to be careful with that. I did mention in the prepared remarks. We – obviously, comps does get harder throughout the year, so just want to make sure people realize that. That means you're likely to see higher revenue growth earlier in the year because we won't have as an easy (inaudible) comp later in the year. We'll just have to see how it plays out. It's January, it's early in the year. We make our hay starting in mid-march, that's kind of when peak season starts for us and goes through end of July or early August. So certainly, when we're talking to you guys in about 90 days about first quarter results we'll have a much better feel for whether we’re seeing that acceleration continue at the pace it did in January or not.

The next question will be from Hardik Goel of Zelman & Associates. Please go ahead.

Hardik Goel -- Zelman & Associates -- Analyst

Hey guys, thanks for taking my question. As I look across the guidance range, my first question is, would you consider the low end of guidance to be as likely as the high end of guidance? And as a follow-up to that, what are the components of guidance that you look to as being drivers of potential downside to guidance, the midpoint, and drivers of potential upside as well?

Sure, Hardik, I think by definition we think it's equally likely, as we put out our guidance at the low side could be hit as well as the high side. We'll certainly be optimistic that we think we can do better but that's the point of the range is we think that they're kind of equal weighted, but we certainly are excited about how January came out and we'll do our best to get more toward the high end of those ranges. In terms of looking to influence our ability to have upside to that or not, again, peak leasing season on the revenue side will be the key. And we're real pleased with how January came out for sure. And so I think that's going to be what will swing us in terms of rental rate achievement and then we are always rate focused first, but we've been successful especially with lower turnover and we saw the lowest we've ever seen as we looked at the fourth quarter, that certainly helped on the occupancy side .

On the expense side, I think it's probably the obvious. It's just we know that we had some struggles last year with repairs and maintenance and that cost to maintain. We're feeling better about it than we have, but we're not 100% there in terms of having everything optimized running. And the proof will be in the pudding just like it is on the revenue side for peak leasing season, will become the summer time when we hit the majority of our work orders that have to do around the HVAC season. We'll be better prepared for that this year by leaps and bounds than we were last year. But I think that will be the true test for us on the expense side as we get into peak work order season. How are we doing? Are the teams optimized or is everything working the way we expect it to? We're pleased with the path we're on right now. And by midway through the year and come that August call, the late July, August call we'll have a pretty good sense I think of how the year is playing out on the expense side.

Hardik Goel -- Zelman & Associates -- Analyst

Thanks. And just one quick one. If you'll indulge me. The move-outs to buy, were they a big driver of turnover being lower, do you see them trend lower year-over-year or what was the trend there?

Year-over-year they trended slightly lower. They've actually been a little bit more lower in the previous quarters and for the year they were definitely lower. So I think it's just -- I think it's more broadly that people are pleased with the services that they're getting and are staying a little bit longer. And fourth quarter, there is not much activity, as you know, Hardik. So it's, I don’t know if you draw a lot of conclusions from fourth quarter. But we did see it low quarter-over-quarter like we did every other quarter this year. And so that certainly did help with the turnover number.

Hardik Goel -- Zelman & Associates -- Analyst

Thanks, Ernie.

Operator

The next question will be from Alan Wai of Goldman Sachs. Please go ahead.

Alan Wai -- Goldman Sachs -- Analyst

Good morning. I had a question on G&A. Is your 4Q number a good run rate? How should we think about incremental synergy savings realized mid quarters, as well as potential seasonality?

Sure. So, we provided a walk in our earnings release that showed how you get from where we ended up for 2018 for core FFO and then to the midpoint of our guidance for 2019. Within that walk, we did call out the fact that both property management expense and G&A combined, we expect to be about a $0.01 better, it's not quite $0.01, it rounds up to $0.01. And so we are going to do a little bit better, more so in G&A than in property management expense but both numbers should be down a year-over-year from where they were in 2018. And that's mainly from the earn-in of the synergies that's still to go, as well as the ones that happened in 2018 and there's not much to go still on the G&A and P&A numbers. So it's not mainly in the earnings from 2018 but then understand there is some cost inflation baked into there too. Cost don't (ph) remain static in terms of what's happening with compensation costs for the organization, and other costs, and so you have a synergy good guy that more than offset an inflationary increase in those costs for 2019.

Alan Wai -- Goldman Sachs -- Analyst

That's helpful. And I was wondering in terms of seasonality and G&A, how should I think of that?

Yeah, there's really not a lot of seasonality in G&A that should be unless we are -- the only thing that potentially would do that would be around our bonus accruals. We try to do a good job throughout the year, anticipating where those will come out. So you should see that to be pretty steady each quarter throughout the year.

Alan Wai -- Goldman Sachs -- Analyst

Thank you very much.

Operator

The next question will be from John Pawlowski of Green Street Advisors. Please go ahead.

John Pawlowski -- Green Street Advisors -- Analyst

Thanks. Dallas or Ernie, could you provide the acquisition and disposition volume targets for this year?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Yeah, hi John. We're going to give early guidance around numbers that feel pretty similar to last year. We think we'll by somewhere between $300 million and $500 million of assets on our base case scenario, and we'll probably sell somewhere between $300 million and $500 million in assets.

John Pawlowski -- Green Street Advisors -- Analyst

Okay. And then Ernie, I understand you're not giving repair and maintenance expenses. I guess I'm still having trouble understanding where the easy comps are going. Middle of the year you guys increased expense guidance pretty meaningfully, that implied over -- over $10 million of what was described as transitory costs. I know you're not completely refined but it still seems like a very, very easy comp that doesn't seem to be baked in the guidance. So I'm hoping you can provide a little bit more of a walk.

Yeah, John, I saw what you had published back in December where you’ve broken things out a little bit more specifically about expectations from sort of different -- the expense line items. And as I mentioned earlier, for net cost to maintain overall, we do expect to be up about 3%. And I know you had a number out there, that I think was down 4% and of course, with our better fourth quarter performance I think that number adjusted some that's probably closer to down 2%. So there’s certainly a disconnect from what you thought we would be with what was happening in the repairs and maintenance world versus where our guidance has come out. Maybe best for us just to talk offline to give you more information to help you try to bridge the gap between the two.

At the end of the day, we had some good guys. We had some -- some tough items that should help us from a comparable perspective. We’ve also taken -- have to take into account where we think cost inflation is going on a year-over-year basis, if none of that was happening, we don't need a good discussion (inaudible) what your assumption was there versus what ours was. But overall, we think we've set ourselves up for a number that is achievable on all of the expenses, where we can get there. And of course we’re going to do our best to try to do better and with some areas where we had some negative one timers last year and hopefully that sets us up to do a little bit better. But also lesson learned from last year, want to go out and make sure we're -- we put out numbers that are achievable and we feel good about and we're confident.

John Pawlowski -- Green Street Advisors -- Analyst

Okay. A follow-up on Wes' question around expense variability. I'm less concerned about what happened in '18 and '19 but just trying to figure out this business over the next three to five years, but using 4Q '18 as a case study to do that. So full year '18 expenses come in well below the revised guidance range and 50% of your expenses actually hit your expectation. With two months left to the year, that implies huge variability for the rest of the line items. I know I've asked this question in the past, but it seems that this business model is going to be a lot more variability, have a lot more variability on expenses versus multifamily. Do you believe that to be the case and maybe a little bit of color there would be great?

Yes. No, John, what I would tell you is, I can speak for us. I don't want to speak broadly for the business. Those two companies are public companies and the other company does a great job of what they do and they can speak to that -- they certainly speak to their strengths on what they do well. So let's just talk about Invitation Homes. We went through a big merger in 2018 and it was a little bit of (inaudible) work. So many things went well for us. There was a little bit of surprise and caught us off guard about having some issues on the R&M side. And as we were wrapping up the third quarter and preparing for the third quarter call and felt that it was appropriate to revise our guidance, we want to do it in a way that we were confident, we wouldn't mess. And in hindsight, we overshot. I would rather have done that than not. And it turns out that the work that's being led by Charles and Tim Lobner and all our folks in the field, they did even better than our wildest expectations in moving some of these things forward. And now still more to go. And so I don't want to draw too much conclusion on just from one quarter. You said the right thing, let's look over the long-term. Over the long-term and some these companies have been in public for a long time and certainly Invitation Homes was before our merger. You didn't see that variability. So I think the majority of the variability is specific to some of the things that popped up when you bring two very large companies together that were doing things a little bit differently and how to get it on -- still not completely on one platform. The proof will be in the pudding over the next couple of years. Will this business be a little bit more variable than multifamily, I guess I'd ask you to look back in the '90s when the multifamily companies were doing mergers. When you saw that kind of activity and go back and see what the variability was in their expenses. When they were putting much smaller companies together, I suspect that they had similar variability in. I think over time, it's a residential business that should be more predictable than other businesses. Not only comparable to a multifamily, but certainly to other businesses.

So I know it's tough when we’re in the moment, John. But we are looking at the long term and feel a lot better where we are today than we were a year ago for sure. And we are all hoping, we want to see less variability in these expenses going on and we think we're going to continue to earn into that less variability as we continue to move forward.

John Pawlowski -- Green Street Advisors -- Analyst

Alright. That's fair. Thanks, Ernie.

Operator

The next question will be from Ryan Gilbert of BTIG. Please go ahead.

Ryan Gilbert -- BTIG -- Analyst

Hi, thanks guys. I understand that demand for single-family rental product looks strong on an overall basis, but are there any markets in particular where you're seeing elevated move-outs to buy or maybe just lower than expected traffic from potential renters?

No, this is Charles. We really haven't seen a demand, as we said, has really been strong across the board. Our turnover has been low, which has been great. Affordability is working in our favor. You can see our occupancy grow in Q4 and continue into January. In addition to our rent growth in January was up across almost all of our markets on a blended basis. So we're really -- we're optimistic on how we're going into the year. There's always a few markets that we can see improvement and we've already started to see that in January. And clearly we're being led with a lot of the West Coast markets and the demand that's out there.

Ryan Gilbert -- BTIG -- Analyst

Okay. Good, thanks. And then how does the labor market feel for your field repairs and maintenance property technicians? I understand it was pretty, pretty tight last year, has there been any change in your ability to source labor either positively or negatively?

Yes, the markets are tight, but we haven't seen any impact to our business on that perspective. I think we have a couple of real positive structural advantages as you think around how long our leadership has been here, our scale that we have. If we do lose somebody, we have a deep bench of talent that we can pull from and ultimately our employees enjoy our high dynamic environment and our mission of serving our residents. So we know that's been a conversation over the summer and we're watching it closely, but we haven't seen any material impact to our techs.

Ryan Gilbert -- BTIG -- Analyst

Okay, great, thanks very much.

Operator

The next question will be from Haendel St. Juste of Mizuho. Please go ahead.

Haendel Emmanuel St. Juste -- Mizuho Securities USA Inc. -- Analyst

Hey, I guess good morning out there. First, Dallas, again (ph) congratulations. I'm curious if there is perhaps anything where your view may differ at all from your predecessor, like say, perhaps doing single-family rental development in-house, maybe more meaningful changes on the geographic footprint, target leverage, or anything else of that nature?

Dallas B. Tanner -- President and Chief Executive Officer, Director

It's good question, fair question. Thank you for the congratulations. Look, I think if Fred were here, I were here, quite frankly any of the other leadership that have been a part of Invitation Homes, our mission has been pretty consistent in terms of making sure that we have scale density and high touch, high-quality service in good location. I think what Fred brought, my predecessor brought to the table was this high single toward some of the tech enhancements that were available to us. And so Charles and Fred were cutting edge in terms of Smart Home capabilities. Some of those things that they're doing really well. We've obviously adopted that. I think as you think through what we believe kind of butters the bread, so to speak, is just that consistent pragmatic approach to how you run your business. And so that won't change.

And what I talked earlier in my prepared remarks about staying true to our DNA. Our DNA, and you guys probably get sick of hearing it, but I would rather pay for the right locations and make sure that we have infill dynamics happening around our portfolio than look for scale and growth opportunities where I've got to be outside of call it, infill locations. And so I think we don't differ all that much. And the good news is we've taken the best from both organizations on the path forward. Charles and I worked very well together, Ernie and I have worked together now for three plus years. We've got a nice energy among management team and so we're excited to -- to really push forward. I think to some of the earlier questions around, what are the opportunities for growth? We certainly see quite a bit of organic growth inside of our portfolio today that we can still go cash. So Charles was right when he said that we want to focus on making sure we finished the integration, but we've got playbook of things that we're thinking about that we want to try to roll out over the next couple of years that we think will not only enhance the value of the real estate and the rents but make the customer stickier. And I think if we get really good at that piece of our business, we're not going to be talking about the history of Invitation Homes, it's about where are we going.

Haendel Emmanuel St. Juste -- Mizuho Securities USA Inc. -- Analyst

Helpful. Thank you. Another question I guess on the same-store expense outlook. I'm curious how much asset sales might be helping that line item? And then if you could confirm if the assets that you're contemplating selling are included in the same-store pool and in that same-store expense?

Dallas B. Tanner -- President and Chief Executive Officer, Director

Sure. So I would say, the assets that we have sold over the last period of time has been kind of neutral to our results. As things came out from the bulk dispositions, we saw the numbers looked like before and after, it really didn't have a material impact with regards to what our numbers would have been for 2018. Then for 2019 and out, there's homes that we've identified for sale and we vacate them, that's when we take them out of same-store because – and those specifically will be homes we are trying to sell to end users, not through a bulk disposition. If there's homes that were identified for sale that we think might go through a bulk disposition and they remain occupied, those we will keep in same-store until we get to the point where we have them under contract, we have a hard deposit and it's highly certain the transaction is going to happen. So what will happen is throughout the year, you will see some homes move out of same-store and as they kind of go through the process or identified for sale. So the answer is a little bit of both, some of them are out of same-store today, but there will be some that we sell today that are currently in same store.

Haendel Emmanuel St. Juste -- Mizuho Securities USA Inc. -- Analyst

Okay, thanks. And last one for me. You've mentioned Seattle and California being some of your better markets. And curious what are the more challenging markets and then -- what type of delta are you projecting between, in terms of revenue, between the upper and lower end of your portfolio in terms of revenue?

So, this is Charles. I'll jump in on the markets where we see opportunity. If you look in the results we put out, Dallas, Denver, Houston, our occupancy was below where we wanted. We've seen a really nice trajectory in all three markets. Dallas has moved up into the 95s and we've seen really good blended rent growth increase in January, as well. We have sustained that occupancy. Denver is on a really nice move. We finished January above 95, 95.2 and February continues to rise, with blended rent growth also going. Houston, we've maintained our occupancy up to 95, rent growth kind of flat. So we see those as markets that will continue to get better throughout the year. If you look back over '18, we've made really good progress on our Florida markets and with such a large presence there, Orlando has been strong for us all year but Tampa and South Florida have really come along. So we're excited about getting the whole portfolio balanced and operating similar to what we've seen out in the West Coast and our Atlanta markets.

Haendel Emmanuel St. Juste -- Mizuho Securities USA Inc. -- Analyst

And quickly on Tampa, I recall there being the issue last year with some of the personnel, just can you quickly update us on that where that stands, personnel back in place, regional or local property management teams fully operating and everything is I guess back to where you want it there? Or can you maybe give us some color on that?

Yes, we're in really good shape in Tampa. A lot of the noise you just discussed was early in the year. We were able to address it quickly, as we talked about, and part of that is showing up in our results in Q4 on both the top line and the bottom line. So we feel really good around where Tampa stands for us.

Well, it's a great question. We have to have a base case scenario and we feel very comfortable to Ernie's earlier points on guidance. With the guidance we're putting out we think we can acquire accretively somewhere between $300 million and $500 million. We think we can also recycle easily between $300 million and $500 million on the sales side. Certainly if there's something opportunistic where we look at a situation that it might make sense we could look at selling or buying more. But I would say that will help us, the base case scenario that we laid out will help us achieve our goals. We want to make sure that we have kind of an eye focused single to getting to investment grade and we know that by calling and selling the parts of the portfolio where we’re seeing underperformance, either recycling that capital or prepaying debt will put us on that path to that investment grade balance sheet that we ultimately want. Ernie, I don't know if you want to add anything to that but I think that is generally how we feel about, Anthony.

Anthony Paolone -- JPMorgan -- Analyst

Okay, thanks. And then you talked a lot about rate and occupancy and those drivers to the same-store revenue picture. Is there anything appreciable to think about through either revenue management or other income that might contribute or not in '19?

Yes, we think, other income will probably grow at a little bit less of a pace than it did in 2018, not significantly so. But I think, and that's our base case to get to our midpoint of guidance. From a revenue management space, I think overall there the team is doing a great job with both Dallas and Charles leadership to continue to trying to optimize. And what we've seen, especially – and we talked about it going into the fourth quarter, we felt really good going into the offseason being highly occupied. And then Charles talked about what the January numbers are. It's really putting us in a position to be more offensive than we've been in the last couple of years as we get into peak leasing season, that's not the wrong way to say more offensive.

We’re just really pleased with where we are at the table and we can optimize. And so the team is doing a nice job there. And again, it's another year of knowledge of both portfolios and teams working together, so that sets us up. We are set up well but we need to start accomplishing as we get to March, April and May.

Anthony Paolone -- JPMorgan -- Analyst

So you think that the revenue management has actually been part of the driver to kind of the strong occupancy and some of this rate growth?

Yes, this is Charles. Absolutely. That was one of the first parts of the combined company that we put together and once we got onto the hood we were able to take best practices of both and it showed up early in the year but by the second half of the year we really hit our stride, and it's showing up well in Q4 and continues into 2019.

Anthony Paolone -- JPMorgan -- Analyst

Okay, thanks. And then last question just on G&A, you kind of talked about that, but just on non-cash comp, any appreciable difference in '19 versus '18 on that front?

Yes. There will be because a lot of that non-cash comp that came from the IPO finished it's vesting in the early part of 2019. So majority of that expense was recognized in '17 and '18. So the non-cash comp around share-based comp does come down materially. Let me -- we had a question about that earlier too Tony. Let me just think about how we can get something out there so folks can get more comfortable about modeling that. It doesn't come into our core FFO number because it's been so volatile. Going forward, it will be much less volatile but now that we're past the two-year point, there was a vesting period on the equity grants associated with the IPO. For those of us – those folks at Invitation Homes are here for that. We'll get to much more of, what I call, normalized run rate of share-based comp. But let Greg and I put our heads together and we'll try to figure out a way that we can provide some more help there for folks.

Anthony Paolone -- JPMorgan -- Analyst

Okay, great. Thank you.

Operator

And ladies and gentlemen, this will conclude our question and answer session. I would like to hand the conference back over to Dallas Tanner for his closing remarks.

Dallas B. Tanner -- President and Chief Executive Officer, Director

Thank you again for joining us today. We appreciate your interest and the team looks forward to seeing many of you in March. Operator, this concludes our call.

Operator

Thank you, sir. Ladies and gentlemen, the conference has now concluded. Thank you for attending today's presentation. At this time you may disconnect your lines. And once again the conference has concluded. You may disconnect your lines.

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